D.C. Private Equity Firm Sells Brazilian Retailer

Washington buyout firm Acon Investments said today it is selling its Brazilian grocery chain GBarbosa to Cencosud, a Chilean supermarket operator, for an undisclosed sum. According to a statement posted on GBarbosa's Web site, Cencosud will pay $380 million and assume about $50 million in debt.

The sale price is more than 13 times what ACON paid for GBarbosa two years ago, according to sources familiar with the transaction, who spoke on condition of anonymity because they were not authorized to speak publicly about specific terms.

Acon bought GBarbosa in March 2005 from Royal Ahold -- the Dutch supermarket chain that also owns Giant Food. Since then, GBarbosa has grown from 36 to 49 stores and nearly doubled its annual revenue to about $1 billion, Acon said.

The retailer, founded in 1955, employs more than 9,000 at its stores in four states in northeastern Brazil and owns one of that region's largest private label credit cards, with more than 1 million cards in circulation.
For Acon, the sale came as the firm was preparing to take the grocery chain public.

"We were actually going to continue to grow it. We always knew we were building an asset that was strategic. After we filed to go public in Brazil, we got aproached by several strategic buyers and we ultimately decided it was best interst of everyone to sell it instead of going public," said Acon partner Ken Brotman.

Acon was formed in 1996 and has more than $1.5 billion under management and concentrates its investments in the U.S., Europe and Latin America. The firm has close ties to David Bonderman's buyout giant, Texas Pacific Group, and is partially funded by it.

Led by founding partners Brotman, Bernard W. Aronson and Jonathan Ginns, Acon has bought companies as varied as a European fresh-cut flower distributor, U.S.-based Spanish language newspapers and a pharmacy chain in Equador. The firm specializes in finding undervalued or distressed companies in a variety of industries and geographic locations.

"We strive to identify assets that are attractive to international players and that's what happened here," Brotman said.

-- Thomas Heath

Editor's Note: The revenue number for GBarbosa was incorrectly reported in the first version of this post. The number has been corrected above.